The Consumer’s Journey in Making Big-Ticket Purchases
[Today, Sue is hosting Ronda Slaven, a VP Research Insights and Thought Leadership at Synchrony Financial, as a guest blogger for The Consumer Connection.]
When we look at consumer behavior and what drives the purchase decision, it’s helpful to look specifically at smaller price points vs. big-ticket items. There are definitive differences in the path-to-purchase for big-ticket items (i.e., items costing $500 or more).
When I think about how I purchase shoes, for example, I go through a very different process than when I purchase a mattress. For shoes, I don’t spend a lot of time researching, and I must admit: Some shoe purchases have been impulse buys. But I can’t say the same for a mattress or flat screen TV.
The results show that consumers spend a certain amount of time researching, both in-store and online. Additionally, some consult friends and check online reviews, and about one third of consumers explore financing for the purchase. But, guess where the purchase is ultimately made? Eighty-two percent of respondents said they ultimately purchase the big-ticket item in-store. Surprised? Let’s explore this further, and add some more numbers to the picture.
For 85 percent of consumers, the path-to-purchase for big-ticket items starts with online research. The vast majority of people used the internet to explore prices and purchase options, up from 80 percent only a year ago. Let’s dig a little deeper:
- Ninety percent of consumers said they compare prices and promotions to ensure they get the best prices.
- Eighty-two percent said they wait to make purchases until they get the best deal.
So, comparison shopping is a major part of the big-ticket purchase process.
Let’s go to the next step: in-store research. Even though in-store research takes more time and planning than online research, our study shows that about 70 percent of consumers research the items in physical stores. That’s a pretty healthy percentage.
And how much impact do friends and online reviews have on the purchase? Well, more than half said they consult with friends, and 38 percent check online reviews.
Now, after all this research on the actual purchase, how about financing it? About one third of consumers said they research financing options. It’s a good idea for brands to introduce financing as part of the purchase process, as 47 percent said they might not have made a purchase, or would have shopped with a competitor, if financing was not available. Additionally, 71 percent of cardholders said they prefer retailers that offer promotional options.
And to reiterate, about four in five people purchase the item in a store. For costlier purchases, people like to touch it, feel it, ask questions and feel confident that they know what they’re getting. After all, it’s more complicated to return a washing machine purchased online than it is a pair of shoes.
So, what is the implication for brands selling big-ticket items? Consumers value more than just price when shopping for a high-cost item. The value equation includes price comparison, consumer reviews and cost of shipping/delivery/installation, as well as financing options. Retailers who ensure that their website and communications strategy include these elements come out as winners. And as the digital channel continues to play a prominent role in the shopping journey, brands should consider strategies that increase their online presence, such as search engine marketing and website optimization.
Customers are looking for a seamless shopping experience. It’s important that brands demonstrate value early in the sales process, serve up detailed information through online channels and provide great customer service for that ultimate in-store purchase.
Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents.
Sue Yasav is the VP of Thought Leadership at Synchrony Financial. She's responsible for developing strategic insights through surveys, social listening and academic studies on topics related to the financial services and retail industries. She authors white papers on consumer trends and articulates impactful strategies for marketers in the areas of digital transformation, customer experience and insights into specific growth segments of the U. S. population. Sue has 20 years of experience in the credit card industry, encompassing 10 years at Citi Cards as VP in the Finance and Marketing organizations. In the past 11 years at Synchrony Financial, Sue has been a Lean/Six Sigma Master Black Belt, a marketing leader for a high-end retail partner in NYC and the leader of Value Proposition Development.